More than 50 North Carolina families will keep roofs over their heads thanks to nearly $6 million in loans made by Local Government Federal Credit Union (LGFCU). The $750-million federally chartered credit union began reaching out to potential victims of subprime lending over the summer, letting them know about two new loan products that could potentially rescue them from uncomfortable mortgage situations.

"We understand that some people simply got into a bad loan product and were then faced with exploding interest rates and outrageous terms and conditions making it impossible for them to stay in their homes," said LGFCU President Maurice Smith. "We couldn’t just sit back and let that happen, so we came up with a couple of products that would offer a better solution for homeownership."

The two products are a Five-Year Adjustable Rate Mortgage (ARM) and an All Savers Mortgage. The Five-Year Adjustable Rate Mortgage is a 20-year mortgage offering 100 percent financing up to $400,000. LGFCU’s rate is currently 6.75 percent and is subject to change every five years. Increases are limited to 1.5 percent each increment with a maximum increase limit of 4.5 percent over the life of the loan.

The All Savers Mortgage is a fixed rate mortgage offering 100 percent financing, a 15-year term and a maximum loan amount of $400,000. A feature of the loan is that an additional 10 percent is financed to open a share term certificate (STC) with a rate equal to the mortgage loan. Additionally, these funds are only made available under a few circumstances: it’s been 10 years since the loan origination, the mortgage has been paid in full, or the mortgage balance is less than the STC balance. Currently the rate for this loan product is 6.5 percent.

"To learn that we have been able to help more than 50 families stay in their homes is wonderful news," said Smith. "But honestly, if we only helped one family keep a roof over its head, this was a success in our book."